If the Interest Rate Is 5% and Cash Flows Are

question 52

Multiple Choice

If the interest rate is 5% and cash flows are $3,000 at the end of year one and $5,000 at the end of year two, then the present value of these cash flows is

• A)$7,392.29.
• B)$8,400.34.
• C)$4,222.50
• D)$400.74.

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Definitions:

Interstate Commerce

The buying, selling, or moving of products, services, or money across state lines, regulated by federal law.

Undue Burden

A legal standard used to determine whether a law or its enforcement is excessively burdensome or restrictive on an individual or group.

Parent Corporation

A corporation that owns a controlling interest of another corporation, called a subsidiary corporation.

Subsidiary

A subsidiary is a company that is completely or partially owned and wholly controlled by another company, known as the parent company.